pre set up -purchased assets for company use -sell to company ?

[Aloha1]

hi,
prior to set up i purchased a pc and software for use by my company and wish to transfer these to the company.

they are not used for any personal use .

how do i account for these and arrange the transfer and payment by the company to me ?


Thanks


Al.

[Clare@InTouch]

Value them at a reasonable market price, then add them to your expenses and repay yourself from the company. In some circumstances you can reclaim VAT if you have the original receipts and they were bought close enough to starting the company, for company purposes.

Your accountant should be able to talk you through it.

[northernladuk]

Your accountant should be able to talk you through it.

That is assuming the OP has one... and he certainly does need one.

[ASB]

Why must it be "reasonable market price". Surely the entire value is ok subject to them being allowable at all and timeframe being reasonable.?

[Clare@InTouch]

Why must it be "reasonable market price". Surely the entire value is ok subject to them being allowable at all and timeframe being reasonable.?

Because otherwise you're making an "unfair" profit as a result of your connection with the company, and HMRC would want to tax you on it. Selling at market value means it's a simple sale of a personal chattel and therefore tax exempt.

It's not the same as buying a computer for £4k when one for £500 would do or travelling first class when coach would do - that's still ok as it's allowable overall, and the price is genuine.

The same reason really, but in reverse, that your company cannot buy an asset for £10,000 and sell it to you for £1. Well it could, but you'd be taxed on the real value as a benefit in kind.

[Aloha1]

thanks for your replys !

thanks again & as per the comment -im about to choose an accountant !

Regards


Al.

[ThomserveBAS]

In the course of setting up my LTD I'd purchased a new HP business printer. Once incorporated (as the time between the two was minimal) my accountant advised I could just submit the original receipt for the full value. As I hadn't opted for FRVS at that time - they also reclaimed the VAT.

Your accountant will advise you on the best approach - you ultimately decide how to proceed.

[TheCyclingProgrammer]

Surely you don't need to actually sell them to company for market value - you can just "give" them to the company can't you?

[northernladuk]

Surely you don't need to actually sell them to company for market value - you can just "give" them to the company can't you?

And lose out on some tax benefits and money in your pocket above and beyond your age/divis??? Why wouldn't you?

[Contreras]

Because otherwise you're making an "unfair" profit as a result of your connection with the company, and HMRC would want to tax you on it. Selling at market value means it's a simple sale of a personal chattel and therefore tax exempt.

It's not the same as buying a computer for £4k when one for £500 would do or travelling first class when coach would do - that's still ok as it's allowable overall, and the price is genuine.

The same reason really, but in reverse, that your company cannot buy an asset for £10,000 and sell it to you for £1. Well it could, but you'd be taxed on the real value as a benefit in kind.

Fair enough if the kit was originally for personal use, but the OP says it was purchased for the business prior to setting up the company. If the receipts are at hand then can the full cost not be put through the books?

If not then the market value of a second hand PC + software might not be worth bothering with.